Treasury releases Sh43.5bn to counties, averting planned shutdown

The National Treasury has finally released Sh43.5 billion to help finance the operations of county governments.

The release of funds to the 47 devolved units, covering the period up to April 2021, comes just days after the 47 county governors threatened to shut their counties down over lack of funds to pay salaries for staff and deliver critical services like health to the people.

The disbursement is part of the Sh103 billion owed to devolved units out of the Sh316.5 billion that was allocated in the 2020/21 financial year that only has a week remaining.

The amount is however, too little, too late and behind schedule considering that counties are required to receive their equitable share from the national government on the 15th of every month of the financial year according to the 2020 cash disbursement schedule enacted by parliament.

The release of the funds was, however, laden with conditions by National Treasury Cabinet Secretary Ukur Yattani that they be prioritised for payment of pending bills owed to suppliers.

“The payment of these pending bills will be closely monitored and future transfers weighed against the fulfillment of this important obligation to the private sector,” Mr Yattani said in a June 23, 2021 statement announcing the disbursement.

The CS further reminded governors that payment of pending bills is critical in spurring economic activity at the county level as part of “our ongoing and inclusive Economic Recovery Programme (ERP).”

Last week, county governors clamented that operations were grinding to a halt owing to the failure by Treasury to release the funds on time.

Council of Governors vice chairman James Ongwae (Kisii) said that financing cunties was not a favour but a constitutional obligation that must be complied by those responsible.

“The taxpayer at the county is also entitled to timely service delivery. The continued delay in disbursement is eroding gains made in devolved governance and affecting economic growth at the counties,” said Mr Ongwae.

Article 219 of the Constitution provides for timely disbursements of the equitable share of revenue. The County Allocation of Revenue Act 2020 goes on to provide a clear structure for the horizontal sharing of resources as guided by the Division of Revenue Act 2020.

The 2020 county governments cash disbursement schedule generated by Treasury and enacted by Parliament stipulates that resources to counties shall be disbursed by 15th of every month.